Equinor discusses Algeria success
Updated: Apr 26, 2019
As part of the preparations of the Algeria Oil & Gas Summit, IN-VR had the pleasure to interview Equinor, discuss the country’s potential, and find out more on the company and its current and future activities and priorities.
- Equinor has more than 15 years of experience working in Algeria, developing and producing two of the largest gas fields in the country, and Africa as a whole. Which reasons lead you to invest in Algeria? What are the country’s key strong points?
Equinor is present in several of the most important oil and gas provinces in the world. In 2003, we acquired 50% of BP’s interest in the joint ventures with Sonatrach on In Salah dry gas fields and In Amenas gas-condensate field in Algeria. Our daily production of about 64000 equity barrels of oil equivalents in Algeria is profitable to Equinor and we have together with our partners Sonatrach and BP developed a model for safe and secure operations of the assets. Given the right framework, we see opportunities to support Algeria in further developing its vast hydrocarbon resources.
- Equinor has been operating and developing the very successful In Salah dry gas field for more than 15 years, together with its partners. In Salah currently has a production capacity of 9 billion cubic metres per year. Production started in three fields (Teg, Reg and Krechba) with four new gas fields developed in recent years. What are the factors that helped you achieve such growth within 15 years?
The In Salah onshore gas development is a joint operatorship between Sonatrach, BP and Equinor. This has allowed for investments in compressors to keep production at the Northern fields which have been operating since 2004. The Southern fields project, which was led by Equinor, added new production from two fields in 2016 and from another two fields in 2017. The Southern fields are tied back into the Northern fields existing facilities, and thereby using existing infrastructure to enhance capacity. The sales contracts with Europe are important to commercialize the gas produced.
- You were awarded the Timissit Permit license in the Illizi-Ghadames Basin in 2014. How is exploration proceeding? What is next for the license?
The Timissit license represents an opportunity to build on our current position in Algeria by adding acreage with exploration potential. We look forward to continuing our partnership with Sonatrach, the operator of Timissit, to test prospectively and commerciality of the license. The plan is to drill two exploration wells during 2019.
- You have been exporting gas to Europe with great success through a long-term sales and purchase agreement. How did Equinor succeed in this task?
A joint marketing company In Salah Gas Limited was created for the marketing and management of gas sales. Equinor is an active partner into this company to develop strategies for gas marketing, and management of sales contracts. We build on our experience as a large gas supplier to Europe from Norwegian Continental Shelf.
- What are your future plans for operating in Algeria?
In 2018, Equinor, BP and Algeria’s national oil company Sonatrach agreed to extend the In Amenas Production Sharing Contract (PSC) by 5 years, from 2022 to 2027. The parties have committed to a work program of 512 million USD and it will be used to enable additional production. Negotiations ongoing to extend the In Salah license for 10 years as it will expire by 2027. Our strategy is to maintain safe and secure operations in existing assets and seek opportunities to support Algeria in developing its vast hydrocarbon resources
- Equinor has been working with ALNAFT and Sonatrach, producing great results and expanding its operations with. How has this cooperation affected your development in the country?
We appreciate the good relationship with Alnaft in developing Equinor’s opportunities in Algeria We signed in October 2018 a Memorandum of Understanding with Sonatrach and BP to assess the opportunity of exploring for additional gas resources in the area around In Salah in Algeria.
- Who are you looking forward to meeting during the first official Algeria Oil & Gas Summit?
We look forward to meet Algerian oil and gas officials, from Sonatrach and Alnaft, as well as peers from other oil and gas companies and other industry experts.